WASHINGTON -- The Comptroller's office plans to announce today that it is cutting fees for examining bank trust departments by half.
"We can save banks money in the trust area," Comptroller Eugene A. Ludwig said. The new role, he added, "will reduce bank costs and benefit banks and their trust customers? Bankers praised the move.
"That would be a nice Christmas present," said William M. Bell, vice chairman of $2.7 billion-asset Liberty Bank and Trust Co. in Oklahoma City.
Liberty has roughly $5 billion of trust assets under management. Mr. Bell said the new rule would save it about $20,000 a year.
Nearly 1,000 banks regulated by the Comptroller's office are subject to trust exams. Starting Jan. 1, hourly exam fees will drop to $50 from $102, the agency said.
Bank trust departments act as fiduciaries for institutional investors and the wealthy, and provide services for bank mutual funds.
Banks with $5-10 billion of trust assets will save roughly $15,000 on their next trust exams, an agency spokesman estimated. Such exams take 300 hours of exam work, which under the old rules would cost about $30,600, he said.
Smaller banks that manage less than $100 million of trust assets can expect to save about $2,500 per exam. On average, the agency spends roughly 48 hours examining those smaller trust departments, the spokesman said. Under the old rules, that cost $4,900. Next year, the agency expects to examine the trust departments in nearly 400 banks, the spokesman said.
The new rules eliminate the complex, statutory formula for calculating trust exam fees. The interim final role reducing the fees will be published in today's Federal Register.
The Comptroller's office is overhauling and modernizing each rule that applies to national banks. The trust fee cuts are part of that regulatory tune-up.
"This is another big step in our effort to reduce burden and create a rulebook that is thoroughly understandable to both bankers and the public," Mr. Ludwig said. "It will give us the opportunity to lower fees pretty substantially in the trust area."
The move is also part of a general attempt by the agency to make the national bank charter more attractive by reducing costs. Earlier this month, it simplified the rules for issuing stock and bonds and announced it would cut corporate application fees.